Seven reasons why your company should do scenarios as part of strategic foresight

The aim of strategic foresight is to find insight in long-term trends that are observable and actionable today. The method to do this is the creation of alternative futures. There are two main tools to create alternative futures: future states, which are like “a photo taken from the future”, and scenarios, which combine “a photo taken from the future” with “a narrative how to end up there”.

We often get asked what is the point of doing scenarios as after all, they do require some amount of time and effort to do properly. The most simple answer would be that

Building scenarios makes sense as we as humans are good at understanding choices and consequences and their systemic links through stories.

Scenarios create stories to which people can easily associate with and through them find different possibilities and opportunities. But there is more into it, once you dig deeper.

Seven reasons why all companies should do scenarios

1. Understanding the competitive environment

By the very nature, all foresight increases participants ability to understand what are most impactful changes in the competitive environment and how one can react to them. Scenarios are an effective tool at describing what are the most important trends behind each scenario, and what are the possible implications of these trends. Scenarios often lead to increased understanding of various stakeholders views and incorporating the values of what is sustainable and fair within the operational environment.

2. Naming the possibilities

Scenarios explore futures that are possible, probable and desirable. Scenarios create a map what different possibilities exist in the future, in which directions the development can head towards. Through the narratives of scenarios, these possibilities are created in a way that is easier to grasp rather than just talking about a trend or two.

3. Justification of chosen strategy

Justifying a chosen strategy is important when dealing with lot of uncertainties and pressures to change to something else. Scenarios can show why chosen strategy should work in the long-term, even if it seems like risky, foolish or too bold at the moment. Scenarios can also show the reasoning behind made choices, the facts and imagination needed to be able to support a specific strategy.

4. Identifying the timing of strategic choices

Scenarios show a logical chain of events that demonstrate how strategic decisions are linked to each other. Scenarios are built on timelines. They picture a road from present to the future, or with backcasting a road from the future to present. It is as simple as when something is pictured on a timeline, it shows the time when it needs to happen. For example, the acquisition of Alcatel-Lucent by Nokia was based on backcasting approach, which resulted in the Nokia executives realising that the time to act is in fact now, immediately – not somewhere in the future.

5. Identifying the ways how to reach a vision or create desirable development

Scenarios show the futures we hope, and what different alternatives we have for reaching it. If one has difficulties with identifying ways to reach a vision or goal, scenarios can show different roadmaps how to get there. There is usually not just one way to reach a vision or goal, but there are often plenty – and identifying these can often be hard especially if people are stuck thinking that what exists currently is what is possible.

6. Showing the meaning of current operations

With scenarios, one can show why the existing operations are meaningful. By communicating the vision about how an organisation understands the future and its role in it, it is easier to create meaning for individuals in their work. A vision itself is good to have, but it is rarely enough. There has to be a tale, a capturing narrative that provides meaning for the current operations. With showing the meaning of current operations, the credibility of the company’s vision about the future grows intensively and it is easier to show and give meaning also for partners and stakeholders working for similar visions.

7. Creating commitment and sparking action from the participants

Linking especially to the points three, five and six, when a vision is made and narrated, one has something to pursue for. When scenarios are built to reach that vision, one starts to believe that it can be achieved, that it is realistic. One can see their own part and purpose of one’s action in the larger picture, how they can be part of making parts of the scenarios into reality. Thus, scenarios are the tool to make the future concrete and touchable, call people to action.